Shiller is credited with developing the identifying tools that are considered vital in picking apart frothy markets and discovering those in a bubble. He helped create indexes for measuring real estate prices and his stock market valuation indicator, the cyclically adjusted price-earnings ratio, or CAPE ratio.

Asked about a real world example that would typify irrational exuberance or a speculative bubble today, Shiller’s answer was straightforward and simple: Bitcoin.

Speaking with Quartz, Schiller explained that it is Bitcoin's story that is making him believe this theory.

The exuberant Bitcoin story

Shiller explains how he hears the whispers of Bitcoin around Yale. That makes him think this is indeed a bubble.

“The best example right now [of irrational exuberance] is Bitcoin. And I think that has to do with the motivating quality of the Bitcoin story. And I’ve seen it in my students at Yale. You start talking about Bitcoin and they’re excited! And I think, what’s so exciting? You have to think like humanities people. What is this Bitcoin story?”

“It starts with Satoshi Nakamoto. He’s never been found. That has a nice mystery quality to it. And then he has this clever idea about encryption and Blockchain and public ledgers, and somehow the idea is so powerful that governments can’t even stop it. You can’t regulate this. It kind of fits in with the angst of this time in history.

“Somehow Bitcoin fits and it gives a sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst.”

Mainstream hype

Shiller comments how the knowledge of things was the real starting point of bubbles, but not so much in today’s sense of spreading the Internet say through the Internet, but more so through the printing press.

“The big thing that happened wasn’t the Internet. It was the printing press, Gutenberg in the 1400s. It didn’t really get going until the 1600s. It was then that we started seeing bubbles,” Shiller said.”

However, many also believe that the mainstream adoption of Bitcoin, and its movement into more established form of investment, is being pushed by its media attention. Additionally, it is this growth from popularity that is making the digital currency grow up, rather than inflate its bubble.